How your age will affect your monthly payment

The standard age for beginning to receive your Canada Pension Plan (CPP) retirement pension is the month after your 65th birthday. However, you can take a reduced pension as early as age 60 or begin receiving an increased pension after age 65.

The amount of your pension will depend on how much and for how long you have contributed to the CPP and on your age when you want your pension to start. If you take it before age 65, your pension will be reduced, by up to 32.4% at age 60. If you take it after age 65, your pension may be larger, by up to 42% at age 70.

There have been recent changes to the early pension reduction and late pension increase to ensure that whether you choose to receive an early or late retirement pension, the amount you receive will reflect your contributions made to the Plan and your average duration of benefits.

Taking your pension before age 65

From 2012 to 2016, the Government of Canada is gradually changing the early pension reduction from 0.5% to 0.6% for each month you receive it before age 65. This means that by 2016, an individual who starts receiving their CPP retirement pension at the age of 60 will receive 36% less than if they had taken it at 65.

The following table shows the percentage by which your retirement pension will decrease for each month that you receive your pension before age 65. These amounts will change every year until 2016.

For example, if you begin receiving your retirement pension in 2013, it will be reduced by 0.54% for each month that you receive your pension before age 65.

Year of retirement % (monthly reduction)
2012 0.52
2013 0.54
2014 0.56
2015 0.58
2016 0.60

For a person who applies for and receives their retirement pension at age 60, this represents a maximum reduction of 32.4% if taken in 2013, 33.6% if taken in 2014, 34.8% if taken in 2015, and 36% if taken in 2016.

Taking your pension after age 65

If you take your pension after age 65, your monthly payment amount will increase by 0.7 percent for each month that you delay receiving it up to age 70 (8.4% per year).

This means that, an individual who starts receiving their retirement pension at the age of 70 will receive 42% more than if they had taken it at 65.

Example

Although Amrita enjoys her job as a nurse, she plans to retire when she reaches 65 in 2014. Based on her CPP Statement of Contributions, she expects her CPP retirement pension in 2014 to be $6,220 annually. This amount will then grow with the cost of living, as measured by the Consumer Price Index.

However, if Amrita decides to delay taking her CPP pension until she reaches 66 in 2015, her CPP retirement pension will increase by 8.4% (0.7% x 12 months). Based on this change, the annual amount of her pension will increase by $522, and will then grow with the cost of living, as measured by the Consumer Price Index.

Note: After age 70

There is no financial benefit in delaying taking your pension after age 70.